New Zealand dollar trades above 62 US cents
Daily Currency Update
The Kiwi dollar is slightly stronger this morning when valued against the Greenback. The Kiwi dollar continued its winning streak for the fifth successive day on the downbeat US Dollar. The NZD/USD pair traded above 62 US cents during the European hours on Friday. The US Dollar is now close to its weakest week since November on the back of dovish comments last week from the Federal Reserve which suggests that the NZD/USD pair could retest the five-month high at 0.6249 lined up with the 0.6250 major level. If the NZD/USD pair manages to surpass the resistance area, it might find support near 0.6300.On the data front last week New Zealand's economy shrank in the third quarter of 2023. Statistics New Zealand revealed on Thursday that the nation’s Gross Domestic Product (GDP) for the third quarter (Q3) contracted 0.3% from the 0.5% expansion in the previous reading, below the market expectation of 0.2% rise. Additionally, the annual GDP came in at -0.6%, compared with the 1.5% growth in Q2 while below the market consensus of a 0.5% increase. Looking ahead this week and on Monday we will see the release of the Westpac Consumer Sentiment. On Wednesday we will see the release of the monthly Trade Balance figures and ANZ Business Confidence.
Key Movers
In the United States on Friday US Retail Sales (MoM) rose 0.3% in November, compared to the expected decline of 0.1%. Initial Jobless Claims for the week ending on December 8 came in at 202K against the 220K expected. The US private sector economy, illustrated by the S&P Global Composite PMI, increased to 51.0 from November's 50.7. Despite the Manufacturing PMI slipping further into contraction at 48.2 from 49.4, the Services PMI had a small rise, reaching 51.3, up from 50.8. The outlook is still negative for the Greenback due to the growing dovish bets on the Federal Reserve (Fed) following Wednesday’s decision, which hinted at more easing than expected in 2024. Federal Reserve (Fed) maintained interest rates at 5.5% in its December policy meeting as expected. Markets are now projecting three rate cuts for 2024. Recent US Bureau of Labor Statistics revealed that the US Consumer Price Index (CPI) for November rose by 0.1% month-on-month and 3.1% year-on-year. Both figures aligned with market consensus, indicating that inflation levels met expectations. US Core CPI, which excludes volatile food and energy prices, climbed by 0.3% MoM and 4.0% YoY, in line with expectations.Expected Ranges
- NZD/USD: 0.6050 - 0.6250 ▲
- NZD/EUR: 0.5550 - 0.5750 ▲
- GBP/NZD: 2.0150 - 2.0350 ▼
- NZD/AUD: 0.9250 - 0.9300 ▲
- NZD/CAD: 0.8100 - 0.8300 ▲